“We are confident this Recapitalization maximizes value for our shareholders by delivering a premium and certainty of value, or an option to remain invested in the market opportunity through SiriusXM, while also better positioning the Company to deliver enhanced and expanded services to our valued subscriber base,” said Mark Redmond, President and CEO of SiriusXM Canada. “We are a proud Canadian player in the audio entertainment market, and we need to make changes to continue to successfully compete. Our operating environment is changing fast, creating long-term growth headwinds. We believe the Recapitalization is a necessary step in overcoming these challenges. Our commitment to supporting the industry and fostering the amazing talent we have in this country is unwavering. We will continue to ensure Canadians have access to the best content and that they will be able to access it in innovative new ways for an overall unmatched listening experience.”

All three of SiriusXM Canada’s largest Canadian shareholders, Canadian Broadcasting Corporation, Slaight Communications, Inc. and Obelysk Media Inc., are supportive of the Recapitalization. CBC has indicated it intends to vote for and elect to sell 100% of its shares into the Offer (for the same consideration as the public Offer). Following the closing of the Recapitalization, the Company will continue to operate under Canadian voting ownership, in compliance with the Canadian ownership rules. Slaight Communications and Obelysk Media are committing to voting for the Offer and selling 89% and 87% of their shares respectively into the Offer (for the same consideration as the public Offer). Upon completion of the transaction, both Slaight Communications and Obelysk Media will each own 33.5% of the voting shares of SiriusXM Canada for a combined total of 67%, and 15% each, or 30% combined, of the equity in the recapitalized business, with SiriusXM owning the balance of votes and equity. While CBC will cease to be a shareholder in SiriusXM Canada following the transaction, it will continue to support the Company as a programming partner.

“This transaction is the best opportunity for shareholders to maximize today’s value by either tendering and taking cash, or continuing to participate in satellite radio by receiving shares in SiriusXM as it continues to grow in the ever expanding audio entertainment industry,” said John Bitove, Chairman and CEO of Obelysk Media.

“Since satellite radio launched in 2024, we have brought more exposure to Canadian talent in more markets than ever before,” added Gary Slaight, President and CEO of Slaight Communications. “It is in large part due to SiriusXM Canada that the Canadian music scene thrives today. In the face of a rapidly evolving audio entertainment market, it is important to continually take steps to remain ahead of the competition. That is what this transaction enables. It is an opportunity to strengthen SiriusXM Canada’s overall market position, enhance the Company’s long-term prospects and further expand the platform for Canada’s great talent into the USA and other parts of the world.”

The Recapitalization enhances SiriusXM Canada’s ability to service its customers in Canada and reduces the risks associated with the business, operations and long-term performance of the Company, given the increasingly competitive and rapidly evolving in-vehicle and overall audio entertainment industry. An expanded relationship with SiriusXM will provide SiriusXM Canada access to existing and future technologies, and products and services not included under existing licence agreements, which further allows SiriusXM Canada to meet the changing and diverse needs of consumers. The transaction also eliminates the uncertainty related to the upcoming license renegotiations with SiriusXM, and the potential impact of such negotiations on SiriusXM Canada’s security holders and customers.

Upon completion of the Recapitalization, SiriusXM Canada will maintain its Canadian headquarters in Toronto. The Company will also preserve the SiriusXM Canada brand, continue to support development of Canadian content and ensure a strong Canadian led governance structure.

Transaction Details

Unanimously recommended to public minority shareholders by all of the independent directors of SiriusXM Canada, and supported by the Company’s three largest Canadian shareholders, the transaction will be completed by way of a plan of arrangement through which Class A shareholders can elect to receive either a) C$4.50 in cash; b) 0.898 shares of SIRI; c) 0.898 shares exchangeable into SIRI shares; or d) a combination thereof subject to certain limitations. Subject to a minimum take-up condition of C$25 million in exchangeable shares and SiriusXM Canada obtaining necessary securities exemptive relief, each exchangeable share will be redeemable for one share of SiriusXM at the election of the shareholder. No more than 35.0 million shares of SiriusXM and exchangeable shares in the aggregate will be issued and there is no maximum cash pro-ration.

The offer price of C$4.50 represents a premium of approximately 22.3% over SiriusXM Canada’s unaffected closing share price on the Toronto Stock Exchange on February 11, 2024, the day prior to SiriusXM Canada’s announcement that it had been approached regarding a potential corporate transaction, and a premium of 17.7% over SiriusXM Canada’s 20-day volume-weighted average trading price on the TSX ending February 11, 2024.

In connection with the transaction, SiriusXM Canada will suspend the declaration and payment of dividends on SiriusXM Canada shares for up to two fiscal quarters. The Company has also terminated its Normal Course Issuer Bid as announced onFebruary 1, 2024. SiriusXM Canada has not made any purchases under the Bid. In addition, SiriusXM has agreed to a standstill agreement with SiriusXM Canada with respect to the issues raised in its demand notice as announced on April 26, 2024. The standstill agreement is terminable upon seven days’ written notice by either party.

Upon completion of the transaction, the only shareholders of SiriusXM Canada will be Slaight Communications and Obelysk Media, who will together own 67% of the voting shares and 30% of the equity in the recapitalized business, with SiriusXM owning the balance of votes and equity

Fairness Opinion and Formal Valuation

The special independent committee of SiriusXM Canada’s board of directors has unanimously recommended that SiriusXM Canada shareholders approve the Arrangement. The special committee received a fairness opinion and formal valuation from Ernst & Young LLP as well as a fairness opinion from its financial advisor, National Bank Financial Markets, that the consideration offered under the Arrangement is fair, from a financial point of view, to the holders of SiriusXM Canada shares, other than Slaight Communications, Obelysk Media and SiriusXM.

Process of Approval

The Arrangement is subject to, among other things, the approval by 66 2/3% of the votes cast by SiriusXM Canada shareholders at a special meeting to be held to approve the Arrangement voting together on an as-converted basis as a single class, as well as by a majority of the minority of the SiriusXM Canada shareholders, which will exclude SiriusXM, Slaight Communications and Obelysk Media. The Arrangement is also subject to receipt of court and any necessary regulatory approvals, including CRTC approval. On closing of the Arrangement, SiriusXM Canada’s shares will be de-listed from the TSX.

The Arrangement is expected to close once all of the approvals have been obtained, which is expected to occur no later than the fourth quarter of calendar 2024. Slaight Communications and Obelysk Media and the officers and directors of SiriusXM Canada have entered into lock-up and voting arrangements pursuant to which they have agreed, among other things, to vote in favour of the Arrangement.  CBC, which is the only other major Canadian shareholder of SiriusXM Canada, has indicated that it intends to vote its SiriusXM Canada shares in favour of the Arrangement.

New Service Agreement Between SiriusXM Canada and SiriusXM

On closing of the Arrangement, SiriusXM will enter into a new service agreement pursuant to which SiriusXM Canada will continue to license SiriusXM’s existing satellite systems to provide its audio service in Canada. This will replace the existing license and trademark agreements between SiriusXM and SiriusXM Canada. SiriusXM  and SiriusXM Canada will also enter into a new advisory services agreement pursuant to which SiriusXM will provide, at the request of SiriusXM Canada, financial and marketing advice and other services such as business planning and support.

Unsecured Notes

SiriusXM Canada’s outstanding senior unsecured notes due April 23, 2024 will be treated in accordance with their terms.

Advisors

SiriusXM Canada’s board of directors and special committee received financial advice from National Bank Financial Markets and Ernst & Young LLP as independent valuator and legal advice from Stikeman Elliott LLP, Blake, Cassels & Graydon LLP and Fasken Martineau DuMoulin LLP. Sirius XM Radio and Sirius XM Holdings received financial advice from J.P. Morgan Securities LLC and legal advice from Norton Rose Fulbright Canada LLP. Additionally retained have been the services of D.F. King as Information Agent and Proxy Solicitation Agent.

SiriusXM Canada security holders and other interested parties are advised to read the materials relating to the proposed Arrangement that will be filed with or furnished to securities regulatory authorities in Canada when they become available, as they will contain important information. Anyone may obtain copies of these documents when available free of charge under SiriusXM Canada’s profile on the System for Electronic Document Analysis and Retrieval at www.sedar.com. This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares of SiriusXM Canada or a solicitation of a proxy.

Early Warning Report Filed for Slaight Communications and Obelysk Media

Each of Slaight Communications and Obelysk Media has filed an updated early warning report in connection with entering into the lock-up and voting arrangements. A copy of the reports can be obtained under the Company’s profile at www.sedar.com, or by contacting David Coriat, EVP and CFO for Slaight Communications at (416) 960-9911 and Lilly Di Massimo, Assistant Secretary for Obelysk Media at (416) 739-3632.